Audio – Loyalty and the death of the ma and pa dealership

The days of the mom and pop auto dealership selling a small number of cars are numbered, said Thomas Stallkamp, a partner at private equity firm Ripplewood Holdings and a former president of Chrysler.

But it may take a recession to speed up the consolidation of the business, he told the Reuters Autos Summit in Detroit on Sunday.

It is difficult and too expensive for the auto companies to drive the process because of state laws that protect franchises, Stallkamp said. “Just pure reducing a guy and having them buy each other out doesn’t seem to be working very fast,” he said.

Stallkamp said that the push for larger dealerships meant that there was little loyalty left in the business. ”The loyalty that the dealer has to a particular company is probably at an all-time low,” he said.